I keep getting mixed answers on this question.  Someone received money from their spouse's 401k in a divorce.  A QDRO was filed and the wife was named the alternate payee.  She received a check in her name in c/o the IRA Share she set up so she deposited the check in her IRA.  Due to extensive attorney fees and marital debt she was left with she took all the money out in the same transaction to pay off the debt she incurred from the divorce, she is also unemployed with 2 kids and was awarded the marital home, she had the federal taxes withheld at 20%.  Here is my question and where it gets hairy, is she exempt from the 10% early withdrawl penalty due to a QDRO being filed?  I've read the the QDRO and it seems to me that she would be and I have conversed with an Enrolled Agent and they seem to agree that she should be exempt from the penalty.  I am not sure how to file this, it comes down to her paying some money out if the penalty should be incurred to her receiving a nice refund if she could be exempt from the penalty.  i would love for her to get a refund due to her economic situation.  If anyone has had experience with this subject I would like some insight.

Thanks in Advance